The wish list of the real estate sector for Budget 2024, deemed as a vote on account or an interim budget, encompasses various expectations, including alterations in the definition of affordable housing, enhanced tax exemptions for homebuyers, infrastructure status for the real estate sector, and increased retail participation in Real Estate Investment Trusts (REITs).
The Confederation of Real Estate Developers' Associations of India (CREDAI) has urged the government to augment the tax exemption limit on the principal amount and interest paid on home loans to stimulate demand for residential properties. Their recommendations include considering a separate exemption for principal repayment of housing loans and increasing the deduction under section 80C for principal repayment from the current limit of ₹1.5 lakh.
Colliers India supports this stance, proposing an increase in the deduction limit for interest repayment on home loans to boost the disposable income of homebuyers, especially those dependent on equated monthly installments (EMIs). They suggest raising the limits for principal repayment under section 80C and increasing the tax deduction on interest paid from ₹2 lakhs to ₹3-4 lakhs for self-occupied properties.
Additionally, the real estate sector advocates for changes in the definition of affordable housing, aiming for standardization and rationalization across government schemes and financial institutions. CREDAI recommends revising the definition to include a unit with a 90-square-meter RERA carpet area in metro cities and a 120-square-meter RERA carpet area in non-metros without a cap on the unit's cost. Furthermore, there is a call for the real estate sector to be granted infrastructure status, facilitating easier access to institutional credit and reducing developers' borrowing costs.
In the realm of REITs, the budget should explore initiatives to encourage greater retail engagement. Ramesh Nair, CEO of Mindspace Business Parks REIT, highlights the significant contributions of REITs and InvITs to the growth of the real estate and infrastructure sectors. Aligning these instruments with listed equity shares and introducing amendments to facilitate input credit during the construction phase are cited as essential measures for supporting the growth of this asset class. As the budget takes shape, these recommendations represent the sector's aspirations for a conducive fiscal environment that supports growth, affordability, and innovation.
